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Birchbox Clients Say Firm Has ‘Vanished’ for Months

Birchbox Clients Say Firm Has ‘Vanished’ for Months

2023-03-11 22:08:06

  • Birchbox pioneered the month-to-month magnificence subscription field and was as soon as valued at almost $500 million. 
  • However after some monetary setbacks, Birchbox was acquired 10 years after launch for simply $45 million.
  • Now, distributors say Birchbox owes them cash, and prospects say they have not gotten a field in months.

In 2014, Birchbox was thought-about a pioneer of the subscription field trade, boasting tons of of 1000’s of subscribers and a $485 million valuation. 

However late in 2021, the model was acquired for $45 million, a fraction of its former valuation, following layoffs and a dwindling buyer base.

Now, Birchbox appears to have all however disappeared, leaving annoyed distributors and prospects in its wake who say the corporate owes them cash. Neither Birchbox nor its mum or dad firm, FemTec Well being, instantly responded to Insider’s request for remark. 

This is how a once-hot startup received its begin, outlined a class, then seemingly “vanished.”

Birchbox was based by two Harvard Enterprise College grads

birchbox founders ceo katia beauchamp haylet barna

Birchbox cofounders Katia Beauchamp, left, and Hayley Barna attend the opening of the Birchbox flagship retailer on July 10, 2014, in New York Metropolis.

Cindy Ord/Getty Photos



Katia Beauchamp and Hayley Barna got here up with the thought for Birchbox again in 2009 whereas they had been college students at Harvard Enterprise College. 

The corporate was modeled off of what Netflix was doing on the time for films: sending prospects DVDs within the mail for a flat month-to-month charge. However as a substitute of films, Birchbox prospects would obtain designer magnificence merchandise, a lot of them in miniature measurement, from the likes of Nars and Kiehl’s for $10 monthly. 

“We had been impressed by different firms doing comparable issues — Netflix and Zappos,” Beauchamp told Insider in 2011. “Our purpose was to vary the way in which that customers store on-line.” 

Beauchamp and Barna secured $1.4 million in seed funding previous to launch, and by 2011, had raised another $10.5 million in Series A funding from the likes of Accel Companions and First Spherical Capital. By then, 45,000 prospects had signed on for month-to-month magnificence bins and the corporate had begun increasing to different classes, like men’s grooming.

Birchbox opened its first retail store in 2014 in New York’s SoHo neighborhood, the place consumers might take a look at out merchandise and construct their very own Birchbox. The corporate additionally raised another round of funding, this time $60 million, which pushed the startup’s valuation to $485 million. By the point it raised its Sequence B, Birchbox counted 800,000 subscribers and had acquired a French competitor. 

The subscription field market rapidly turned crowded

Employee sits working next to sign that says Birchbox inside company headquarters

Birchbox headquarters in 2014.

James Leynse/Corbis through Getty Photos



Whereas Birchbox was an innovator on the planet of month-to-month subscription bins, by the mid-2010s you may subscribe to common deliveries of something from razors to undies to pet food.

However the startup had additionally spawned imitators within the magnificence trade, which meant that Birchbox was shedding market share. In 2016, The Wall Road Journal counted at least 300 subscription beauty services and famous that rival service Ipsy was beating Birchbox when it comes to subscribers: Ipsy had over 1.5 million, whereas Birchbox had simply over 1 million. 

And whereas Birchbox supplied prospects the choice to purchase full-size merchandise after they’d tried the mini model, it did not end result simply in additional gross sales for Birchbox — the corporate was bolstering sales at traditional retailers too. Bloomberg reported Sephora and Ulta had been getting a 5% and 6% gross sales increase, respectively, from Birchbox subscribers. In the meantime, Sephora had launched a month-to-month magnificence field of its personal. 

Barna, the cofounder and co-CEO, introduced in 2016 she was leaving the company to affix enterprise capital agency and Birchbox investor First Spherical Capital. That very same yr, Birchbox began scaling again its development plans, pausing on new bodily retailer openings, suspending plans to develop in China, shrinking its New York Metropolis headquarters house, and reducing about 50 of its 300 workers, The Journal reported on the time. 

After funding struggles and layoffs, Birchbox was acquired

birchbox 3833

A Walgreens Birchbox store.

Enterprise Insider/Jessica Tyler



By 2018, Birchbox was struggling to safe extra funding or discover a purchaser. The corporate in the end raised debt financing following a $15 million buyout and later struck a deal with Walgreens to put in Birchbox retailers inside choose shops. Walgreens additionally took a minority stake within the firm. 

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In the meantime, Birchbox’s subscriber rely was dropping, and the corporate raised its monthly subscription price for the primary time in its historical past. Birchbox conducted another round of layoffs in early 2020, downsizing its international group by roughly 25%. 

In October 2021, Birchbox was acquired by FemTec Health, a startup centered on utilizing know-how to “remodel the whole healthcare expertise for girls.” FemTec Well being paid $45 million for Birchbox and the deal resulted in Beauchamp, the remaining cofounder and CEO, leaving and promoting her stake within the enterprise. Beauchamp has since develop into CEO of Victoria Beckham Magnificence.

Clients are actually accusing Birchbox of getting ‘vanished’

A Birchbox subscription box with assorted makeup and skincare items to its right one of the best subscription boxes

Birchbox’s month-to-month field consists of pattern sizes of high-end magnificence merchandise.

Birchbox



However a yr later, purple flags had began to seem. An Axios investigation discovered that FemTec Well being hadn’t paid a few of its distributors and a content material creator. A few of these payments nonetheless hadn’t been paid as of January, and one vendor has taken the corporate to court docket over the missed funds, Retail Dive reported. Birchbox was stated to be contemplating submitting for chapter in November, WWD reported, across the similar time that the model posted a press release on Instagram acknowledging its struggles. 

“Birchbox is going through a bunch of unprecedented setbacks which can be affecting all of you, our cherished members,” the publish learn. “Throughout the subsequent couple of weeks, we will share particulars concerning the future and what you possibly can count on.” 

However Birchbox hasn’t posted since, and the feedback on that publish and an an identical one on Fb are flooded with annoyed longtime prospects, a lot of whom say they have not acquired a field since October. 

“What a joke,” one Instagram person wrote. “I paid for a yr subscription and solely received 3 months value earlier than the corporate simply vanished. And I have been a buyer for YEARS.”

Birchbox’s web site additionally gave the impression to be disabled for a number of weeks. Although it has since come again on-line, it isn’t doable to finish the check-out course of. 

“We’re experiencing some technical difficulties at the moment,” the web site reads. “Please examine again at a later time.”

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